WASHINGTON: The faltering US job market has prompted economists to take a much dimmer view of the country's growth prospects.
That's a shift from just a few weeks ago, when many were upgrading their forecasts. Friday's surprisingly bleak jobs report for May followed a spate of disappointing data.
Manufacturing activity slowed, an index of home sales fell and consumer confidence tumbled. Mounting troubles in Europe and elsewhere have heightened economists' concerns.
"The latest economic data have been decisively disappointing," Michael Feroli, an economist at JPMorgan Chase, wrote in a client note.
JPMorgan Chase sharply reduced its growth forecast for the July-September quarter to a 2 per cent annual rate, down from 3 per cent.
It cited the weaker US hiring and a likely drop in US exports related to slower growth overseas. And JPMorgan Chase now forecasts growth of 2.1 per cent for 2012, down from 2.3 per cent.
Julia Coronado, an economist at BNP Paribas in New York, said she now expects growth of 2.2 per cent this year, down from her previous forecast of 2.4 per cent.
She also revised down her estimate of growth in the April-June quarter to a 2.2 per cent annual rate, from a 2.5 per cent rate.
"We keep hoping that we're going to turn a corner and move into a stronger phase of recovery, and the door keeps getting slammed shut," Coronado said.
Forecasting firm Macroeconomic Advisers and Swiss bank UBS have also marked down their expectations since Friday's jobs report.
As a general rule, it takes about 2.5 per cent growth to generate enough hiring to keep up with population growth and prevent the unemployment rate from rising.
The reduced forecasts suggest that hiring may not strengthen much this year. After months of fitful expansion since the recession ended three years ago, many analysts had expected the economy to begin strengthening steadily.
Last month, the National Association for Business Economics said its latest survey of economists found rising expectations for job gains and housing construction.
And in April, the Federal Reserve raised its forecast for growth this year to nearly 2.7 per cent, from a January estimate of 2.5 per cent. Now, it looks as if the recovery is stumbling again.
indiatimes.com
That's a shift from just a few weeks ago, when many were upgrading their forecasts. Friday's surprisingly bleak jobs report for May followed a spate of disappointing data.
Manufacturing activity slowed, an index of home sales fell and consumer confidence tumbled. Mounting troubles in Europe and elsewhere have heightened economists' concerns.
"The latest economic data have been decisively disappointing," Michael Feroli, an economist at JPMorgan Chase, wrote in a client note.
JPMorgan Chase sharply reduced its growth forecast for the July-September quarter to a 2 per cent annual rate, down from 3 per cent.
It cited the weaker US hiring and a likely drop in US exports related to slower growth overseas. And JPMorgan Chase now forecasts growth of 2.1 per cent for 2012, down from 2.3 per cent.
Julia Coronado, an economist at BNP Paribas in New York, said she now expects growth of 2.2 per cent this year, down from her previous forecast of 2.4 per cent.
She also revised down her estimate of growth in the April-June quarter to a 2.2 per cent annual rate, from a 2.5 per cent rate.
"We keep hoping that we're going to turn a corner and move into a stronger phase of recovery, and the door keeps getting slammed shut," Coronado said.
Forecasting firm Macroeconomic Advisers and Swiss bank UBS have also marked down their expectations since Friday's jobs report.
As a general rule, it takes about 2.5 per cent growth to generate enough hiring to keep up with population growth and prevent the unemployment rate from rising.
The reduced forecasts suggest that hiring may not strengthen much this year. After months of fitful expansion since the recession ended three years ago, many analysts had expected the economy to begin strengthening steadily.
Last month, the National Association for Business Economics said its latest survey of economists found rising expectations for job gains and housing construction.
And in April, the Federal Reserve raised its forecast for growth this year to nearly 2.7 per cent, from a January estimate of 2.5 per cent. Now, it looks as if the recovery is stumbling again.
indiatimes.com
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